Northwest NEWS

February 7, 2000


Choices have been desperately limited

   A recent letter outlining how well-deserved and how wonderful Proposition 13 has been to the State of California cannot go unanswered. The gross misunderstanding of why the proposition was passed, and the state's ability to manage under the proposition, requires clarification.

   First of all, Proposition 13 was not passed simply in response to rising property taxes. It was passed in response to rising property taxes, yes, but other forces, powerful forces, were at work.

   It's not well known, but Howard Jarvis (one of the two men credited for passage of Proposition 13) had tried a few years earlier to pass a proposition similar to Proposition 13. That earlier Proposition had failed at the polls. Why? Because the set of circumstances wasn't the same as when Proposition 13 passed.

   The missing ingredient was a pair of decisions by the California Supreme Court known as "Serrano v. Priest." Under the Serrano decisions, the court made three important findings. One was that property taxes based upon property values (that is, rate-based taxes) were unconstitutional. This is similar to a recent finding by the New Hampshire Supreme Court regarding its school funding.

   The second finding was that new taxes (existing taxes were allowed to be grandfathered in) had to be parcel-based. That is, any new taxes assessed by a municipal body against a piece of property couldn't be based on the value of that piece of property; instead, new taxes were imposed as a set fee against each piece of property.

   In addition, the Court found that school funding should go through the state, and not be locally controlled Well, the State Legislature came up with a plan which redistributed a fair amount of school money around. Also, they created a system where tax rates remained stable while not capping school taxes. Thus, as property values went up, so did tax bills. And the money piled in faster and faster as property values (not property tax rates, mind you) went skyrocketing.

   So the missing ingredient to Jarvis' first effort for tax relief failed because most people saw the system as fair. That is, people with more expensive properties paid more, the tax monies stayed local (pretty much), and as local needs were sated, tax revenues would be capped.

   Serrano blew those all out of the water; property tax assessments in the future weren't tied to value, the money went to the state for local redistribution, and the state's needs (due to a large number of under-funded districts) were immense. Couple that with skyrocketing property values and indecision in the State Capital as to what to do, and voila! Prop 13. So, no, this myth of 700% tax increases is not the one and true reason for Prop 13 passage. If that were the case, Jarvis' earlier effort would have passed.

   And as to what it did to the State of California: well, I just moved from there, largely because I couldn't stand what Prop. 13 was doing and had done to the state. It sank school per-pupil expenditures from one of the highest (sixth, I think) in the nation to 42nd in the nation.

   It created a system in which gross inequality in taxation is built into the system (next-door neighbors in similar homes can and do pay grossly different tax bills). It changed a tax system which taxed businesses relatively heavily to one where homeowners bear the brunt of the property tax burden.

   It created, statewide, an environment where those who want the best education for their kids prefer to send their children to private schools. It created an environment where all taxes became viewed as an evil burden and not as a fair burden which would be used toward improving one's community, town, and state.

   When coupled with Serrano, it created a setup where, if a community did happen to decide to tax itself in an onerous fashion, because, say, that community absolutely wanted the best schools, best parks, and best libraries, they could not do it. The hurdles were too high and the requirements for new taxes too severe to do it.

   So, no, I do not see that California spends its revenue wisely. What's wise about a system where local municipal bodies have little control over their revenue stream? What's wise about a system where school systems are forced to abandon almost all but core programs? What's wise about a system which is so out of whack that a proposition (Prop. 98) is needed to insure a minimum level of funding for schools?

   This does not strike me as wise. I believe that people interested in the betterment of their children and their communities would prefer a wisdom based on choice. Under Prop. 13, the choices for all have been desperately limited.

Robert Schulman, Woodinville